September 21, 2012
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, PowerShares VRDO Tax-Free Weekly (NYSE: PVI ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at PVI and see what CAPS investors are saying about the ETF right now.
|Total Net Assets
||Seeks investment results that correspond to the price and yield of the Bloomberg US Municipal AMT-Free Weekly VRDO Index. The fund generally invests at least 80% of its total assets in variable rate demand obligation bonds that are exempt from federal income tax with interest rates that reset weekly.
|Year-to-Date / 1-Year / 3-Year Returns
||0% / 0.2% / 0.4%
SPDR Nuveen Barclays Capital Short Term Municipal Bond ETF
iShares S&P Short Term National AMT-Free Municipal Bond Fund
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 59% of the 29 members who have rated PVI believe the ETF will underperform the S&P 500 going forward.
Just last month, one of those Fools, All-Star TerryHogan, succinctly summed up the PVI bear case for our community:
All this ETF will ever produce is an equivalent to short-term rates paid by municipalities. Since they're tax-free yields, I'd imagine the rates will be even lower than short-term corporate rates. So basically you're getting nothing after the management fee. I can't believe anyone buys this.
If you want market-thumping returns, you need to protect your portfolio from any undue risk. Luckily, our special report on ETFs highlights three funds that are poised to soar in the next recovery. It's 100% free, but won't last forever, so click here to access it now.
Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.